BP has sold its petrochemicals business for $5bn (£4.1bn) to Sir Jim Ratcliffe’s Ineos, in a deal that will boost the oil company’s under-pressure balance sheet. Ineos will pay BP a deposit of $400m, followed by $3.6bn when the deal completes and then another $1bn in three instalments by June 2021. The deal will result in Ineos taking on BP’s aromatics division, which produces chemicals for polyester used in clothing, film and packaging, as well as BP’s acetyls business, whose products are used in food flavourings, paints and glues. The decline in oil prices triggered by the coronavirus pandemic has damaged the finances of oil producers around the world, accelerating BP’s need to cut costs and restructure. BP said the crisis would take as much as £14bn off the value of its assets and it is cutting 10,000 jobs worldwide. BP’s chief executive, Bernard Looney, said he recognised that the sale would be a surprise for the petrochemicals business, and the company would “do our best to minimise uncertainty” for the 1,700 workers who will move to Ineos. When it and other sales have completed, BP will have met its target of divesting assets worth $15bn as it tries to reduce a debt pile that stood at more than $60bn at the end of the first quarter. Looney said: “Strategically, the overlap with the rest of BP is limited and it would take considerable capital for us to grow these businesses.” The move took analysts by surprise, and shares in BP rose by 3.5% to £3.15. The share price is still down by about a third since the start of the year. For Ineos the deal represents a doubling down on its bet on plastics, despite long-running and high-profile campaigns against the rising tide of plastic waste. The pandemic has been seized upon by some advocates for single-use packaging. Ineos, the UK’s largest private company, reported that sales and profits were down in the first quarter of 2020 compared with the previous year, but Tom Crotty, a director, said in April that it had been relatively unaffected by disruption from the pandemic. In March Ineos built two factories producing hand sanitiser to cater for increased need at the height of the crisis. The petrochemicals acquisition is only the latest deal by Ratcliffe, Ineos’s chairman, whose stake in the company has given him a fortune estimated this year at £12.2bn by the Sunday Times, making him Britain’s fifth richest person. Ineos, which started with a buyout of BP’s chemicals business in 1992, has grown to an annual turnover of $60bn. In 2005 Ineos did another deal with BP, paying $9bn for Innovene, a subsidiary that at that point comprised the majority of the oil company’s chemicals assets and two refineries. Ineos said the petrochemicals deal was “a good fit” with its existing businesses, including rejoining two parts of a site in Hull and expanding the company’s operations in Geel, Belgium. It will include the transfer of facilities in the US, UK and Belgium, as well as the Asian growth markets of China, Korea, Taiwan and Malaysia. In 2019 the businesses produced 9.7m tonnes of petrochemicals. Ratcliffe said: “We are delighted to acquire these top-class businesses from BP, extending the Ineos position in global petrochemicals and providing great scope for expansion and integration with our existing business.” Ratcliffe, a prominent backer of the Brexit campaign, has used his wealth to fund a number of surprising investments away from his core business in recent years, including buying the French football club Nice and the British cycling team previously known as Team Sky, and investing in work on a successor to the rugged Land Rover Defender off-road vehicle.